Some digital opportunities didn’t exist even a few years ago, but now are part of what young athletes will be evaluating as they consider where, or whether, to go to college.
LAS VEGAS — After playing five basketball games in less than 48 hours, Dereck Lively II slung a gym bag over his shoulder and headed for the exit at the corrugated metal warehouse where he had spent much of the last three days performing in front of N.B.A. scouts.
Before Lively reached the door, though, he was handed a tablet. Tap here, he was told. Just like that, a 30-second highlight video unfolded on the screen of Lively smiling, dunking, mugging, running and dunking some more, all during the camp.
“This is sick,” said Lively, his eyes lighting up as he watched.
It was also something else: a business proposition.
Ten digital copies of that clip — a contemporary version of a trading card — are being sold as nonfungible tokens for $199 apiece. It is an investment that could appreciate if Lively fulfills the promise that N.B.A. scouts see when the 7-foot-1 high school senior with impossibly long arms bounces around the court swatting away shots, gobbling up rebounds and throwing down dunks.
Lively would get half the proceeds, as much as $1,000 in this case, according to Aaron Hawkey, a co-founder of BallerTV, a media company that streams mostly high school sports events and produced the nonfungible tokens, or NFTs.
For decades, Lively could not have received any money from such an agreement without jeopardizing his college eligibility. But that could change in a matter of days as barriers that have prevented amateur athletes from cashing in on their fame are set to come down.
At least six states — including Texas, Florida and Georgia — have laws that on July 1 will allow college athletes to profit off the use of their name, image and likeness. A dozen more states have passed statutes that kick in later, and still more have bills winding their way through legislatures.
The N.C.A.A., the major governing body of college sports, has been undecided about its next move since the Supreme Court ruled on Monday that the association could not stop modest education-related payments to athletes.
The N.C.A.A. Division I Council, which makes day-to-day decisions and rules changes for college sports’ highest level, could grant a waiver to athletes next week so that those in states without name, image and likeness laws could still make some endorsement deals.
If the gates do open soon, it would allow athletes like Georgia quarterback J.T. Daniels, a Heisman Trophy hopeful, or Lexi Sun, a Nebraska volleyball player with 75,000 Instagram followers, to begin signing endorsement deals.
Some moneymaking opportunities may be straightforward: a cut of jersey sales, an autograph signing at a sporting goods store, or pitching a product on a billboard or to social media followers. But a new market is sure to attract some novel enterprises, like the NFTs that Hawkey’s company created for 30 players at the basketball camp.
“This is such a gray area right now,” said Hawkey, who added that if some high school federations prevented athletes from profiting off their image, the players’ proceeds would be donated to a charity of the player’s choice. Since the buyer’s identity is protected through a blockchain, Hawkey said it was unclear who was buying the NFTs. “We’re still trying to figure out if these are speculators or friends or agents,” he said.
For the top boys’ basketball players deciding where, or whether, to go to college, the imminent loosening of name, image and likeness rules is another consideration as their recruitment ramps up this summer.
“It’s on a lot of guys’ minds, especially if you’re a brandable kid,” said Richard Isaacs, a guard from Las Vegas who has recently visited Oklahoma State, Arizona State and Creighton.
Endorsement deals are unlikely to be anywhere near the millions that would await a star player in the N.B.A. And the opportunities to make money may still not trump more traditional criteria a recruit would consider, like the coaching staff, facilities and campus social life. But college coaches are already suggesting ways that players might benefit through third-party deals, even if the details are squishy for now.
DeMarion Watson-Saulsberry, a guard from Minneapolis, said that Minnesota Coach Ben Johnson told him on a recruiting visit that as a hometown athlete he would be better positioned to make money off the use of his name with the Gophers than if he played at an out-of-state school. Keyonte George, a guard from Lewisville, Texas, said that on his recruiting trip to the University of Texas in early June, Coach Chris Beard played up the presence of the computer manufacturer Dell and the social media company TikTok in or around Austin.
“It’s a cool thing to think about: You can make some money, up your name now,” said George, who expected to have similar conversations on visits to Baylor, Oklahoma State and Kentucky.
Still, as coaches tout the possibilities, they privately admit that only elite players or players with outsize social media followings are going to garner anything more than pocket change.
“This is going to apply to less than 1 percent,” said Dinos Trigonis, a basketball event organizer who put on the camp here. “Name, image and likeness is going to transform people who are getting paid illegally to be paid legally. All you’re doing is moving the underground market above ground. I’m all about kids having these rights, but you also have to be honest with a lot of those kids — they’re all not going to be eating at the buffet.”
One of those who surely will be is Lively, who attends Westtown School, a boarding school in West Chester, Pa. In addition to his talent, he is fortunate in another respect: His mother, Kathy Drysdale, is a marketing director in the Penn State athletic department.
But even if she understands how athletes might make third-party deals, she said there would be so many threads to untangle depending on the restrictions that would be placed on amateur athletes by the N.C.A.A., Congress or state legislatures. Adding to the murkiness, the N.C.A.A. decided, after months of delays, to reverse course and not hire an outside administrator to review marketing deals between athletes and third parties.
“As much as I’m in the industry, there’s an awful lot to wrap your head around,” Drysdale said in a phone interview. “Are you allowed to get an agent? Are you allowed to get a marketing rep? Who does all this extra work to find a deal? What sponsors are going after what kids? Football has how many people on the roster, more than 100? Not everybody is going to get something. Same with basketball.”
She paused and laughed, thinking that she might soon be taking on a second job.
“Am I going to be the ‘momager’?” she said.
Lively said there had been cursory discussions about marketing opportunities on video calls with coaches, but the topic did not come up on a recent trip to North Carolina — in part, Drysdale figured, because that state does not have a law on the books, though a bill has been introduced. There were more detailed discussions this week when Lively visited Kentucky. Drysdale said Coach John Calipari told them the state’s governor planned to issue an executive order ensuring the state’s athletes are not left behind — the order was issued Thursday — and highlighted how a recruit’s social media following could jump thanks to the college’s ardent fan base. Lively plans to visit Duke next week and is also considering Penn State.
Lively said he was trying to take the long view. He wants to play in the N.B.A. as soon as possible, he said, but is probably not yet ready for the N.B.A.’s developmental league, the G League, where players can earn $125,000 salaries.
Drysdale, who played at Penn State, said her son wanted a college experience — even if it was for one year. She also said he would not reclassify and graduate high school early, as one of his travel teammates, Jalen Duren, whom some consider the top prospect in the class of 2022, is considering.
“If you go to a pro league, you’re going to have to become an adult,” Lively said. “You’re going to have to pay bills, buy houses, buy apartments and all that. If you go to college, you have most of that taken care of. It’s going to be a hard decision to make: Do you want to stay in college for a year or go to a pro league for a year and play against grown men and work it out?”
For years after the N.B.A. prohibited its teams from drafting players directly out of high school, starting in 2006, there were few places to go besides college as a way station between high school and the N.B.A.
In recent years, though, other options have surfaced: Darius Bazley, now with the Oklahoma City Thunder, spent 2018-19 as a New Balance “intern,” part of an endorsement contract that assured him at least $1 million (and as much as $14 million). LaMelo Ball, this season’s top rookie with the Charlotte Hornets, and R.J. Hampton, now with the Orlando Magic, spent the 2019-20 season playing in Australia’s professional league. And four players last year — including Jalen Green, a top prospect in next month’s draft — jumped from high school to the G League. Overtime Elite, an upstart league, will also pay six-figure salaries to players still in high school, while another new venture, the Professional Collegiate League, plans to pay players $50,000 to $150,000 in addition to stipends for college tuition.
Rod Strickland, who recruits talent for the G League, was in Las Vegas this month, along with N.B.A. scouts from nearly every team, at the Pangos All-American Camp, which has over the years attracted future stars like James Harden, Russell Westbrook, Anthony Davis and Trae Young. (College coaches were not permitted to attend live events during that period, though they could watch via livestream.)
Many eyes at the camp were on Duren, a muscular 6-10 forward whose perimeter shooting has developed enough for one N.B.A. scout to draw comparisons to Miami Heat center Bam Adebayo. Duren, who has planned recruiting visits to Miami, Memphis and Kentucky this summer, said that college coaches had spoken with him broadly about making money off his name, mentioning jersey signings or working basketball camps, but that he had not given much thought to the possibilities.
“It’s never been and never will be about the money,” said Duren, who by the end of the summer plans to decide whether to attend college or take a professional route and whether to finish high school early. “This next step, I’m just looking at how to get better, how to develop. I don’t know where that’s going to be. I’m still figuring that out. Some people think if you offer a kid some money, he’s going to go that route, but I’m not one of those kids. I just want to get better, and I love the game too much to cheat it that way.”
Still, with a robust social media following, an incandescent smile — “His smile is gorgeous; it melts your heart,” Drysdale said — and the attention that comes with being considered the top high school player in the country by some people, there will very soon be some value in that.
Duren’s 10 NFTs from the Pangos Camp, priced the highest at $299 apiece, quickly sold out.
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